Maximum family income to be eligible for Medicaid in Texas is $5750

byRobert Nagleon1/24/2010

Here’s some amazing analysis by Alec McGillis that Brown’s victory in Massachusetts may have been triggered by a revolt by people who are sick of helping out states which are stingy about Medicaid (like Texas):

Brown’s message underscores a little-noticed political dynamic in a country where rates of the uninsured vary widely, from Massachusetts to Texas, where 25 percent are uninsured. Seeking national universal coverage means sending money from states that have tried hard to expand coverage, mostly in the Northeast and Midwest, to states that have not, mostly in the South and West.

Supporters of the national legislation say this transfer is an unfortunate but unavoidable aspect of expanding coverage. But, they argue, the nation is misinterpreting expressions of self-interest in Massachusetts as grand opposition to universal health insurance.

“Massachusetts’s reforms continue to be popular in Massachusetts — sufficiently popular that Brown did not repudiate them,” said Paul Starr, a Princeton public affairs professor. “Here is a state that has enacted a similar reform and it is popular. That should encourage people that if it’s done at the national level, that it would work as policy, and that it would be popular.”

Conservative analysts disagree, saying the Massachusetts law has been less successful than advertised and that this helped motivate residents to cast a vote they knew would set back national reform. In a new report from the libertarian Cato Institute, Michael Cannon argues that the law has covered fewer people than state data suggest and that it has cost residents and businesses more than supporters say. “Things are not as hunky-dory as people have been saying,” he said.

Divining voters’ motivation is difficult. In a Boston Globe poll taken in October, 59 percent of state voters said they supported the state law, a drop of 10 percentage points from the prior year, and only 11 percent said they wanted the law repealed. There were no exit polls Tuesday to gauge voters’ views on health-care reform.

Federal programs often divert money from richer states to poorer ones, but the regional dynamic is more stark in health-care reform. As it stands, the federal government shares the cost of Medicaid coverage based on states’ income, ranging from a 50-50 split in the richest states to 80 percent in the poorest.

But under the legislation, that disparity could grow in a way that does not necessarily accord with state wealth. Many states, and not necessarily the poorest, set stringent terms for Medicaid eligibility, while others have eased entry. In Texas, parents qualify for Medicaid only if their family income is below $5,720, while in Virginia, the limit is $6,380. In Wisconsin, New Jersey, Maine, Minnesota, Illinois, Connecticut and the District of Columbia, the cutoff is $40,000 or higher. In Maryland, it is $25,500.

The legislation would set a single standard for Medicaid eligibility, about $28,000 or $33,000 for a family, and the federal government would pay almost the entire cost of newly eligible people. That means that states with looser standards would continue to pay as much as half the cost for a broad swath of people that in other states would be paid for almost entirely by the federal government. This disparity, which would largely benefit Republican-leaning states, would be exacerbated if Congress decided to extend to other states a deal that the Senate gave Nebraska to fund the entire cost of covering newly eligible people.

Both the House and Senate bills attempt to address this disparity: The Senate bill includes extra money for Massachusetts and Vermont; the House bill helps additional states, including New York. But John Holahan of the Urban Institute said Congress could have done more to even out the state-by-state impact.

“It’s really striking,” he said. “The real beneficiaries of this are the states in the South and the West who are opposing health-care reform.”